IRS Criminal Investigation (IRS CI) Presents: Tax Case of the Month

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May Tax Case of the Month

Minnesota man sentenced to 9 years in prison for tax fraud scheme that targeted tribal community

A purported consultant from Prior Lake, Minnesota, orchestrated a six-year tax scheme that targeted members of Minnesota’s Shakopee Mdewakanton Sioux Community. Beau Wesley Gensmer convinced tribal members to hire him to prepare and file their tax returns but falsified the information in those returns, without his clients’ knowledge, to line his personal pockets. This led to Gensmer being sentenced to nine years in prison and three years of supervised release for wire fraud and assisting in the preparation of false tax returns following an investigation by IRS Criminal Investigation (IRS CI) special agents.

From 2012 to 2018, Gensmer’s scheme worked like so. His clients would provide him their tax information. He then doctored the information without their knowledge to include fraudulent business losses and charitable contributions to lower their tax obligations and provided this false information to two tax return preparers who then prepared and filed the returns on his clients’ behalf. The return preparers relied on the information Gensmer provided, which resulted in 63 fraudulent tax returns being filed with the IRS with an estimated tax loss of approximately $6.7 million. Clients paid Gensmer 30% of their tax refunds as a fee for his services. He also provided his clients audit protection services just in case they were audited by the IRS. If an audit took place, he submitted more fabricated documents to the IRS in furtherance of the scheme.

In addition to his prison sentence, Gensmer must also pay more than $4.7 million in restitution to the U.S. government.

Each month, IRS CI leadership selects one criminal case adjudicated during the previous month to serve as the Tax Case of the Month. This month’s case was investigated by CI’s Seattle Field Office.

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CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.